Heritage Foods Q1 FY27 Revenue Up 18% to ₹1338 Crore; VAP Contribution at 44%
Heritage Foods reported Q1 FY27 revenue of ₹1338.1 crore, up 18% YoY. Value-added products (VAP) contributed 44% of revenue, reaching ₹563.6 crore, a 40% increase. Despite headwinds, milk procurement rose 2% to 1.81 MLPD. PAT decreased by 38% to ₹25 crore due to higher costs. Strategic moves include increasing stakes in subsidiaries.
The revenue growth is positive, but the decline in profitability and the challenges faced in procurement costs indicate a mixed impact on the company's short-term performance.
While revenue showed strong growth, the profit margins and PAT declined due to increased procurement costs, making the overall sentiment neutral.
Heritage Foods Limited announced its investor presentation for the first quarter of FY27, highlighting significant achievements and financial performance.
The company reported a record quarterly revenue of ₹13,381 million (₹1338.1 crore), an 18% year-on-year increase. The value-added products (VAP) portfolio contributed 44% to the revenues, reaching ₹5,636 million (₹563.6 crore), a 40% increase year-on-year. When including consumer packs of Ghee and Butter, VAP revenue reached ₹6,322 million (₹632.2 crore), up 39% year-on-year, contributing 49% to total revenue.
Despite elevated milk procurement costs and constrained availability, Heritage Foods strengthened its procurement ecosystem and market share. Milk procurement volumes increased by 2% YoY to 1.81 MLPD, with procurement prices rising by 7% YoY to ₹46.61/L. Milk sales volumes remained stable at 1.16 MLPD, with an average selling price increase of 4% to ₹58.68/L.
Consolidated Profit Before Tax (PBT) stood at ₹335 million (₹33.5 crore), a 39% decrease year-on-year, and Profit After Tax (PAT) was ₹250 million (₹25 crore), down 38% year-on-year. EBITDA margins were 4.6%, down from 6.5% in the previous year.
Strategic initiatives include making Heritage Novandie Foods Limited a wholly owned subsidiary and increasing the stake in Peanutbutter and Jelly Limited. The company is also developing a new ice cream plant in Shamirpet, Hyderabad, with a 31 million litres annual capacity.
Heritage Foods aims for margin expansion, increased VAP contribution, geographical expansion, and brand building. The company has a strong relationship with over 300,000 farmers and a digitally enabled distribution network servicing over 10 million consumers daily.
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